Bangladesh Pharma Industry: Opportunities in Global Generics

Kaiser Kabir

CEO, Renata Limited

Vice-President

Bangladesh Association of

Pharmaceutical Industries

Bangladesh… an emerging economy

• Fast growing economy with consistent GDP growth over 6% • Goldman Sachs has placed Bangladesh in its "Next 11” countries to watch • Citigroup, JPMorgan Chase and Merrill Lynch consider Bangladesh to be the next Asian success story • Standard Chartered has included Bangladesh in the prestigious "7% Club" • Bangladesh is included in the "PWC30” list of high growth economy by 2050 • BD ranks #1 in HSBC’s Global Trade Confidence Index 2015 (ahead of US, Germany, China and others) • Standard & Poor’s (S&P) and Moody’s have adjudged Bangladesh economic outlook as ‘stable’ • 2nd largest apparel exporter; 8th largest remittance recipient in the world

Pharmaceutical Industry

• Evolved from an import dependent to self reliant, export oriented sector

A success story

• The sector has grown from strength to strength over the last 40 years

• Technology and knowledge based sector; not easy from an LDC country faced with enormous economic challenges • The only LDC that has a well developed pharma sector

• Pharma sector has huge export potential

Bangladesh Pharmaceutical Market

• Total market size >$1.6 billion (IMS 2015)

• Nearly self sufficient; 98% demand met by local production

• Historically good growth maintained (>10%; last 3 yrs ~15%)

• Declared as the thrust sector owing to huge export potential

• Largest white collar labor intensive employment sector

• Registered pharmaceutical companies: 257

Bangladesh Pharmaceutical Market

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

1981 1990 2000 2010 2015

Bangladesh Pharmaceutical Market (in Constant 2015 US $)

Bangladesh Pharmaceutical Market

Top 10 Companies Share of Share of

Sales Growth 2012 66.26% 69.36% 2013 67.00% 74.70% 2014 68.30% 80.54% 2015 68.31% 68.45%

Bangladesh Pharmaceutical Market

Modern factories in Bangladesh

Beximco Pharma

Incepta Pharma

Modern factories in Bangladesh

Beximco Pharma

Incepta Pharma

Modern factories in Bangladesh

Beximco Pharma

Incepta Pharma

Modern factories in Bangladesh

Beximco Pharma

USFDA

Therapeutic Goods Administration (TGA), Australia

ANVISA, Brazil

EMA

UK MHRA

Health Canada

TFDA, Taiwan

Global Accreditations

Capabilities in Hi-tech Delivery Systems

• Export base is small but is growing fast

• The Government has declared Pharma as the Thrust Sector

• Medicines are being exported to more than 100 countries

• Leading companies are making forays into highly regulated markets

of US, EU and Australia

Export potential

Some of our global clients

UNICEF

KK Women’s & Children’s Hospitals, Singapore

Raffles Hospital, Singapore

ADF France

CENABLAST, Chile

Save the Children

DKT

Opportunities in Global Generics

Currently valued at ~ $350 b

Generic drugs will continue to grow maintaining healthy rate

• Drugs worth more than $150b coming off patent by 2020

• Rising healthcare cost, particularly cost of medicine has become a global concern

• Developed countries are increasingly promoting access to generic drugs

• MNCs are outsourcing their production from cost-effective destinations

• Major generic hubs India and China are losing cost advantages

Bangladesh Pharmaceutical Market

Medicine price in Bangladesh is currently among the lowest in the world

Competitive Price

• Anti-cholesterol Crestor 10mg (rosuvastatin) @$0.25 in BD vs $7.25 (US)

• Anti-diabetic drug Januvia 50mg (sitagliptin) @$0.25 in BD $11.25 (US)

• Generic Sofosbuvir $6 (BD) vs brand $1000 (12-week @84000)

• Generic Harvoni $12 (BD) vs brand $1130 (12-week@95000)

Savings of more than 99%

API Industrial Park

• This is being set up by the GoB at Munshiganj,

37 Km from the capital city Dhaka

- to achieve self-sufficiency in API production - to gain competitive advantages in global marketplace

• Total land area: 81 Hectares

• Overall project cost $30 million

• Handover within 2016

TRIPS Advantage

Bangladesh and other LDCs are exempted from patent protection for an extended period until 2033 (from original 2016). Bangladesh is allowed to produce any patented medicines without taking prior permission from innovator.

Competitive Labor Cost

Visits from 2 WTO DGs

Pascal Lamy and Roberto Azevedo visited pharma facilities of Beximco and Square respectively and were highly impressed seeing the world-class pharmaceutical manufacturing facilities in the country. "In many ways, there lies an important asset for Bangladesh. I believe Bangladesh has the potential to become Singapore in South Asia.” – Pascal Lamy, ex-DG, WTO (during his Bangladesh visit in March 2012) "Bangladesh can continue to consolidate its economic and social advancement” - WTO DG Roberto Azevedo (in Bangladesh, June 2014)

Availability of skilled manpower;

Cost of labour is among the lowest in the world;

4 to 6 times cheaper than India and China

Increasing investment in R&D

Significant generic drug capabilities;

Increasing number of international accreditations;

WTO/TRIPS waiver till 2032

Investor friendly environment ;

Skills in diverse dosage delivery systems

Global footprint in more than 100 countries

Bangladesh Pharma Advantages (Moving Beyond Contract Manufacturing)

Focus on R&D and Regulatory Affairs Sound track record of partnership/alliance with global MNCs

Growing pipeline for US, EU and Australia

© Beximco Pharma November 2010

Japanese NIPRO Corporation forays into

Bangladesh Health sector with JMI in 2012

Japanese investment USD 45 ML following 3 Companies

Presently operating in 20 global

destinations

Collaboration

The Challenges Facing Japan

Demographics

High Drug Prices

Low Generic Penetration

High Cost of Skilled Personnel

The Japanese Strength

2nd Largest Pharmaceutical Market in the World

Reputation for Exceptional Quality

Expertise in R&D

Areas of Collaboration with Bangladesh

High-quality, low cost Manufacturing Base for Accessing Japanese

Market, World Markets, and TRIPS Advantage

Contract Research

Regulatory Expertise